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  • ETF Pullback Choices: Still in Worry Mode  [View article]
    Have to disagree with your analyses. Most of these ETFs did not move up with the price of oil since the ME "crises". I actually think there is some catching up to do to the price of oil, if anything, so would not bet against energy ETFs at all these unless the demand has dropped in proportion to the price increase. As far as I know, there has not been a large reported demand drop, so the profits should be pretty substantial in coming months.
    Mar 11, 2011. 06:03 PM | Likes Like |Link to Comment
  • The February Employment Report Was Good News  [View article]
    Nice article. The questions nobody seems to be able to answer is how this Bull, and by default our economy, can continue this track when there are practically no plans to hire people. Either this is a new "paradigm", and we should BEWARE here because that's exactly what people like the Fools said before the tech bubble crash, or we will start to see significant declines in the market and GDP by the end of 2012. Which is it going to be?
    Mar 6, 2011. 02:48 PM | 2 Likes Like |Link to Comment
  • 4 Reasons the Stock Market Has Doubled  [View article]
    I agree with you - my friend made a mistake, but now feels justified, so he will likely stay 100% in equities for another 10 years. He also is not even diversified, just one VG fund for much of his 401K. Like many I suspect, he just doesn't want the headaches of making decisions, so he makes one big one and rides on it. He might make me out the fool, who knows.

    For me, I was almost all out by 2008 crash because I could see that mortgages in Atlanta were largely being sold to people with NO income and limited prospects and then with nothing down to buy 4000 sf houses they couldn't possibly afford. No rocket scientist needed.

    Very good article.
    Mar 6, 2011. 11:49 AM | 2 Likes Like |Link to Comment
  • 4 Reasons the Stock Market Has Doubled  [View article]
    "You hit the nail on the head. There is simply no place else for the money to go as long as rates stay at or near zero."

    I agree with others here that the lack of investment alternatives had a major - if not the only - impact on the gains seen since the bottom of 2008. But, this is clearly not a sound reason to invest in US equities going forward, a fools game. Sure, you ride the trend for a while but when it flash crashes or when the inevitable interest rate hikes hit the fan to cool real inflation in the psychobabble world of Bernake, then what? You can't catch a falling knife. I spoke with a friend recently who never sold and is back to where he ALMOST was pre-crash (that is all the doubling got you, BTW). He says he is forced to invest 100% in equities so he has enough retirement. Scary.

    I think this has all the earmarks of pending disaster. We might see some moderate gains now for a couple months, but then at some point reality will strike the stock market hard with Stagflation, the worse possible outcome. We have to eventually face the much higher than stated REAL unemployment, REAL inflation and Govt debt levels the likes of which the world has never seen. As the WSJ reported last week, the small guys are now wading into the froth, that in itself should be enough to cause second thoughts about this phoney bull market.

    What David says is almost unflappable and an excellent analysis of the past, but the continued bull is predicated on unrealistic PEs going forward from here, which I find highly suspect in a US economy looking directly into the eyes of stagflation.
    Mar 5, 2011. 07:56 PM | 2 Likes Like |Link to Comment
  • Impending Crude Correction Could be Fueled by Mass Rollover  [View article]
    Ok - no disrespect intended, just that it was odd to me that you felt necessary to use HER in caps. No guy would do this and if you can find any post online that has I will eat my hat! And yes, the term idiotic may have been a little strong for you but this is really a dog eat dog world and people are naturally Alpha for the most part. Such is life. Ciao.

    Mar 5, 2011. 07:14 PM | 1 Like Like |Link to Comment
  • Impending Crude Correction Could be Fueled by Mass Rollover  [View article]
    Pciasuli - in case you don't know, a blog involves differing viewpoints and you have to get used to people not agreeing with you or even one another. Its not an "attack" for gods sakes. Take it easy, this is how people learn from one another - its called the free exchange of ideas. Actually, based on your post, I kinda suspect a little anti-male feminism here, is that correct? I am sure that will get your shackles up! Just vote the down arrow on this post if that's how you feel, I won't mind and won't call it an attack.

    As for your question, yes, I think any spike in oil will temporarily cause disruption. But steady, rising prices over the long haul will result in adjustments on all levels and have less impact than you think.
    Mar 4, 2011. 10:24 PM | 1 Like Like |Link to Comment
  • Impending Crude Correction Could be Fueled by Mass Rollover  [View article]
    Oil is not going down because of a myriad of factors: KNOWN instability in the ME, KNOWN lower US dollar due to ongoing inflationary environment, KNOWN lack of proven alternative energy technology for the throngs of new drivers in China and India. No, OIL is going nowhere but up - the only wild card is a worldwide recession, highly unlikely.
    Mar 4, 2011. 08:05 PM | 3 Likes Like |Link to Comment
  • March 2011 Investment Strategy: Overweight Risky and Inflation Assets  [View article]
    "My personal view is that unless the high oil price lasts for a sustainable period of time, it will not derail the economic expansion. "

    Of course oil prices will remain high for sustainable periods, assuming you agree that todays oil is "high". On this basis, I guess you would think our economy would be derailed but then later in your otherwise excellent article you think it will not have the negative affect that most think? We always adjust. Just want to get your thoughts here.

    IMO, what will derail the economy on a massive scale is nothing that oil can do. It will be the interest rate hikes that inevitably follow inflation (now occurring) and our fiscal entitlement nightmare.
    Mar 4, 2011. 05:45 PM | Likes Like |Link to Comment
  • Is the Real Crisis About to Begin?  [View article]
    "What's going to happen when the feds, states, and all of the local governments start to reduce their work force ..."

    Those people will have to work like the rest of us, earn a living the hard way, report to work ontime and be afraid now and then. They will not, for the most part, do anything to create jobs because entrepreneurship is foreign to them. So, they will go on the dole and maybe become somebody's cheap labor. I won't lose sleep.

    Its us against them, and we might finally win.
    Feb 28, 2011. 08:23 PM | 4 Likes Like |Link to Comment
  • Is the Real Crisis About to Begin?  [View article]
    Looking at the S&P corrections as % decline (est):

    Feb 11 Correction was -2.8%
    Nov 10 Correction was -4%
    Aug 10 Correction was -7.6%

    So, corrections have occurred with declining percentages, esp. with the big -15% loss in mid June 10. Not sure what this means, maybe a technician can chime in? I would say it shows that Bernake is controlling the slides pretty well.
    Feb 28, 2011. 11:42 AM | 1 Like Like |Link to Comment
  • Is the Real Crisis About to Begin?  [View article]
    Not a contrarian here. Graham is right. But, what do you do? If you think that the hordes of new cash will cause inflation, and I certainly do, bet on commodities and maybe other inflation hedges like REITS. Of course, Bernake caused inflation will pull interest rates up will ultimately hurt real estate. Bernake says inflation only exists in your mind, its a "belief system". Right, and frogs can jump to the moon. I have a Put on the DOW for the near term.

    Another point, the WSJ just noted that the small investors burned by the last stock debacle are now wading back in, but you know how this works. The small guys are last to the dance and the first guys out with the losses. The little guy never wins.
    Feb 28, 2011. 10:13 AM | 10 Likes Like |Link to Comment
  • Market Volatility Requires a Sell Strategy  [View article]
    Buy a put on DIA, good insurance for a correction. I don't know if we are double dipping or not, but if it does, look for 700 points or more drop. If not, I think its due for at least another 250 points or so from here just as a long overdue overdue correction. The market seems to have discounted everything to this point (unemployment, lowered GDP, broke governments, inflation, etc).
    Feb 26, 2011. 04:49 PM | 1 Like Like |Link to Comment
  • Why Spiking Oil is Deflationary  [View article]
    Plebian is correct. The killer is interest rates. If they finally move up as they should to continue the immense spending that will be required to pay for our increasingly dependent demographic, it will wreck housing and middle class net worth. That will create more dependency on govt, now and forevermore.

    I see no realistic scenario that says this won't happen, esp if you consider the 2% annual GDP growth rate expected for the next *70* years (see recent CBO report). This is about half of what we experienced since the end of WW2. We just won't be able to generate the money to pay for our extravagances, so we borrow more, interest rates go up, housing goes south and do does the rest of the economy. Check and mate.

    BTW - sorry about off topic here - but good article and true enough on all counts. Its the trend that matters and makes CFOs most worried and looking to hedge as much as possible to forgo the inevitable. Thats what SW Airlines did and look where they sit now!
    Feb 25, 2011. 08:39 PM | 1 Like Like |Link to Comment
  • Mega-Cheap Mega-Caps Could Fuel Mega-Gains in 2011  [View article]
    OK - I will be the crazy contrarian here. I can't see the gains that are represented. Debt at all levels will soon drive rates upwards and that is never good for stocks. Then, you have inflation which can be good for stocks but not if rates take the gains away. Higher rates will mean another recession bounce back from the second wave of housing destruction. Imagine if you will what will happen to housing if commercial mtg rates go up 1-2 points? And, that is still well below the historical average. We are walking a very fine line here with our whole system.

    On top of the rate problem, downpayments are now in the 20% range in most metro areas, so the buying pool is almost nonexistant.

    When the economy has significant debt and inflation headwinds for the near future - and maybe even mid term - stocks have to retreat big. The only good bets I see for the near term are energy (esp oil services), most all commodities and UGL.

    Just made a nice 1 month gain on the OIH option, sold today.
    Feb 17, 2011. 04:04 PM | 1 Like Like |Link to Comment
  • Emerging Markets Not Participating in Global Rally  [View article]
    I think the decoupling is in inflationary expectations. The US knows it has to keep inflation, and interest rates low, because higher rates that come too soon (before incomes and jobs catch up) means housing does not recover and the economy dips back. So, we fake the inflation rate (keeping rates contained, a little) and the rest of the world lives with real inflation. If we all had the same inflationary base, there would be no decoupling.

    Lets also remember that inflation in emerging markets means that the economies are heading in the right direction. I think LT this will continue and ultimately at the developing worlds expense - the pie does get bigger but the pieces are larger in EMs.
    Feb 12, 2011. 09:29 AM | Likes Like |Link to Comment